SHU (Cost Center) Plan
Structured Review / Walkthrough
Key factors that management should focus on during a horizontal unit (cost
center) review session include:
- Understanding of business units served
- Understanding of the objectives of the business units
- Expertise in activities performed and path to improvement
- Focus on most critical issues
- Action plans consistent with business unit strategies
. Tasks identified
. Resources allocated in support of SBU strategies
. Time frames established
. Personnel responsibilities assigned.
For maximum results, SHU review sessions should be attended by:
- The SHU management team (the presenters);
- Representatives of the SBUs for which the SHU performs activities;
- Representatives of other horizontal units which perform a similar
function;
- Representatives of other horizontal units which are strongly impacted
by the performance of the SHU under review;
- Corporate or group management of the SHU team.
Performing a structured walkthrough prior to a review session is important
and worth the 'extra' time. In practice, where SBU review sessions and
walkthroughs are creative and exciting, SHU reviews are generally more
focused - the discussion often centers around:
- are the businesses getting the value they pay for?
- how can the activities be performed better and at lower cost?
When two or more SBUs have conflicting requirements for the performance of an
SHU activity, maximizing shareholder value may require an SBU to modify its
goals for the good of the whole corporation, even if the results of that one
SBU will suffer.
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